Question: If you get an additional, somewhat significant, sum of money into your bank account, what is the course of action you would take regarding that new money?
A) Spend it immediately on a big new purchase or expensive vacation and worry about future budgets at a later date.
B) Put the money into the savings account or retirement fund not knowing when those extra resources may be needed in the future.
Here’s why the question matters:
Late last week, Iowa’s three-person Revenue Estimating Conference (REC) increased the state’s revenue projections for the upcoming year by approximately $80 million dollars, driven largely by Iowa’s strong agriculture economy.
That number is certainly not an insignificant amount of anticipated revenue for our state but the question remains, what should be done with it?
If you answered A – you are philosophically more in line with legislative Democrats who are advocating opening up the checkbook in order to approve added spending for more government projects.
If you answered B – you are philosophically more in line with the Iowa Senate Republicans, who believe now is the time to use fiscal restraint and save for the future.
Here’s Iowa’s fiscal situation in a nutshell:
ü Iowa’s state budget is approximately $6 billion dollars
ü Iowa also gets about $6 billion dollars from the federal government bringing total spending to approximately $12 billion dollars annually
ü Iowa is just coming off having a near $1 billion dollar deficit created during the previous governor’s administration and a Democrat controlled Senate and House
Given what we know about Iowa’s current fiscal situation (which is now finally back on solid footing) and given what we know about the federal government’s fiscal condition (jaw-dropping deficit spending and trillions of dollars in debt), wouldn’t it make more sense to adopt a careful and responsible approach to state budgeting?
Senate Republicans think so.
The situation is Washington is too uncertain to leave our state without a cushion.
This is why our budget proposal spends about $.97 for every dollar taken in, significantly limits the use of one-time dollars to pay for ongoing expenses, balances without raising taxes and is free of gimmicks and reckless accounting tricks.
Fundamentally, we believe in looking to the future and thinking about the next generation of Iowans. The potential that Iowa has is exciting and exists in all 99 counties; we cannot afford to spend us down a path of fiscal irresponsibility.
It’s not fair to our kids and grandkids.
So the answer to the multiple choice question boils down to this: we must always be good stewards of the taxpayers’ dollars and resist the siren call to spend more even if the state sometimes has a little more available to spend.
Hopefully, by the end of the session, 150 legislators and one governor will all get the answer right.
As always I welcome hearing from constituents and can be reached by phone at 515/281-3371, by mail at Senate of Iowa, State Capitol, Des Moines IA 50319, or email at firstname.lastname@example.org.